The Associated Press February 8, 2011, 7:23PM ET

Profit grows at meal reservations site OpenTable

OpenTable Inc. said Tuesday that its fourth-quarter net income grew 65 percent as more diners used its free service to book restaurant reservations and more restaurants signed up for its electronic booking system.

Before OpenTable released its earnings report, its shares closed up 48 cents at $85.28; they touched an all-time high during the day of $86.20, and they rose two cents after hours. The company went public in May 2009 at $20 per share; the stock has risen more than fourfold since then.

OpenTable makes money from the monthly fees that subscribing restaurants pay for its service. It also receives a fee for each meal reservation that ends with a diner paying a bill at the appointed restaurant.

The company said 13,795 restaurants in North America are signed up for its services, 27 percent more than a year earlier. The number of diners who used opentable.com to make a reservation and then ate at the restaurant grew 51 percent to 17.8 million. The company's international division -- which is about half the size -- grew faster, and the number of diners making reservations on their smart phones jumped 189 percent.

In the last three months of 2010, the company posted net income of $5.1 million, or 21 cents per share, up from $3.1 million, or 13 cents per share, in the same period in 2009.

Excluding one-time charges for acquisitions, stock options for employees and other expenses, OpenTable said it earned $8 million, or 33 cents per share. Analysts polled by FactSet had expected earnings of 22 cents per share. Analysts typically exclude one-time charges.

Revenue in the same period rose 61 percent to $30.8 million from $19.2 million. Analysts had expected $30.3 million.

The company said its operating expenses rose 68 percent to $25.4 million, mostly because it hired more employees. The company's work force grew 55 percent.

For the year, OpenTable's net income nearly tripled to $14.1 million, or 58 cents per share, from $5.1 million, or 22 cents per share, in 2009. Revenue grew 44 percent to $99 million from $68.6 million.


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